CDK Global Inc.'s revenue and net earnings rose in the company's fiscal first quarter, compared with a year-ago quarter that was affected by the pandemic.
The Hoffman Estates, Ill., dealership management system giant on Tuesday said that the first quarter of its 2022 fiscal year showed solid growth despite headwinds from the inventory shortage that has emptied out dealership lots this year.
CDK added automotive DMS customer sites for the 11th straight quarter, CEO Brian Krzanich said, bringing the total to 9,107 as of Sept. 30. That is up from 8,966 as of Sept. 30, 2020, and from 9,062 as of June 30.
"I'm pleased with these results, which met our expectations despite a modest slowdown in the transactions business, driven by inventory shortages in the auto market," Krzanich said Tuesday on a call with analysts. "Our ability to excel in 2022 demonstrates that CDK has become a fundamentally different company than it was just a few years ago. We've been focused on making investments that strengthen our core business."
CDK in September said it planned to acquire insurance technology company Salty Dot Inc., which allows consumers to purchase auto insurance at the same time they're buying a vehicle. CDK executives said the purchase of Salty will enable dealerships to tap into a new revenue market and help improve customers' car-buying experience.
The company's transaction revenue dipped by 2.5 percent in its first quarter to $42.8 million. CDK receives transaction fees for connecting dealerships to companies that process credit reports and vehicle registrations, and it equates to close to 10 percent of CDK's total revenue. CFO Eric Guerin told analysts that was "driven by lower vehicle registrations revenue as vehicle sales were impacted by supply chain disruptions."
CDK's financial results covered continuing operations, excluding its international business, which it sold in March to private equity firm Francisco Partners.
Q1 revenue: $440 million, up 6.4% from a year earlier
Q1 net earnings attributable to CDK: $71.7 million, up 28.7% from a year earlier
Q1 adjusted EBITDA: $170.3 million, up 1.7% from a year earlier
Records: Total company DMS sites and revenue per site
Guidance: Revenue, $1.78 billion to $1.82 billion; net earnings attributable to CDK, $235 million to $265 million
